Ratan,
And just how do you define value?
In my opinion, value is not much more than a gut call. The ratios such as ROA and ROE for WIND is meaningless besides saying that WIND's financial performance has been poor in the last year, which everyone already knows. I guess that I could make a DCF basing on conservative assumption, or price to sales ratio, which is often used for software companies, but I don't think any of these would be needed, because both would show the stock grossly undervalued. Yet, I have no idea how much lower it will go.
Historical patterns show that technology gets in and out of extreme cycles. The current down cycles started two years ago, and it's much closer to the bottom than the next peak. On a macro scale, companies have been taking huge charges during this bad time, and if any thing, Enron has force companies to be more conservative in their accountings. The mix of blood bath accounting, down cycle, impariment writedown, and Enron has given the management every incentive to make thing look worse than they actually are. Of course, during the good time, the opposite would happen. Base on my experience, it's very likely that growth would start within the next 12 months, if it has not started already.
Khan |
